Proposal for Energy Strategy Toward a Decarbonized Society Achieving a Carbon-Neutral Japan by 2050
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Proposal for Energy Strategy Toward a Decarbonized Society Achieving a Carbon-Neutral Japan by 2050 31 May 2019 Renewable Energy Institute Acknowledgements In creating this proposal, we made reference to interviews with energy companies, consultants, research institutes and other organizations and benefited greatly from the generous cooperation of energy experts at outside research institutes. We would like here to express our gratitude. Authors & Research Team Teruyuki Ohno Executive Director, Renewable Energy Institute Yuko Nishida Manager, Climate Change Group, Renewable Energy Institute Takanobu Aikawa Senior Researcher, Renewable Energy Institute Yuri Okubo Senior Researcher, Renewable Energy Institute Akiko Hirose Research Staff, Renewable Energy Institute Disclaimer Although the information given in this report is the best available to the author at the time, Renewable Energy Institute cannot be held liable for its accuracy and correctness. About Renewable Energy Institute Renewable Energy Institute is a non-profit think tank which aims to build a sustainable, rich society based on renewable energy. It was established in August 2011, in the aftermath of the Fukushima Daiichi Nuclear Power Plant accident, by its founder Mr. Son Masayoshi, Chairman & CEO of SoftBank Corp., with his own resources. Table of Contents Executive Summary ........................................................................................................... 1 Chapter 1: Develop a Future for Japan Through Decarbonization .......................... 13 1.1 1.5°C Report proposes achieving net zero CO2 emissions by 2050 ........................................ 13 1.2 Reducing domestic emissions and pioneering a new Japan-led business model for a decarbonized economy ............................................................................................................. 14 1.3 Energy efficiency and renewable energy should be central to decarbonization strategy ........ 15 1.4 Positives and shortcomings of proposal by Roundtable for Long-Term Strategy under the Paris Agreement as Growth Strategy........................................................................................ 17 1.5 Evaluation of the Government’s Long-Term Strategy Proposal ............................................... 18 1.6 Five strategies toward a decarbonized society ......................................................................... 19 Chapter 2: Five Strategies Toward Net Zero CO2 Emissions in 2050 ....................... 21 Part 1 Supply 40-50% of Japan's Electricity with Renewable Energy by 2030 ........................... 21 1. Electricity generated from renewable energy will drive conversion to a decarbonized society ................................................................................................................................................ 21 2. Outlook for solar and wind power generation in Japan .......................................................... 26 3. Selecting power sources for 2030 and 2050 .......................................................................... 33 Part 2 Phase Out Coal-fired Power Before 2030 ....................................................................... 40 1. Coal-fired power is being phased out around the world ......................................................... 40 2. Japan's persistent reliance on coal ......................................................................................... 42 3. Internationally criticized coal-fired power export policies ....................................................... 45 4. Prolonging life of coal-fired power plants using CCS technology ........................................... 46 5. Japan must clearly communicate a shift away from coal-fired power .................................... 49 Part 3 Japan Should Develop a New Decarbonized Business Model for the Basic Material Industries ........................................................................................................................ 51 1. The industrial sector has the potential to significantly reduce its emissions .......................... 51 2. The rise of a circular economy that will transform the basic material industries .................... 57 3. Japan as a new manufacturing power in the decarbonized era ............................................. 63 The correct way to manufacture and use hydrogen (Column) ............................................. 64 Part 4 Strategy for Zero-Emission Buildings .............................................................................. 67 1. Current state of Japan's buildings and need for improvement ............................................... 68 2. Policy direction in realizing zero-emission buildings ............................................................... 71 3. Creating an attractive urban environment and society through zero-emission building strategy ................................................................................................................................... 78 Part 5 Pursuing Decarbonization in the Transport Sector .......................................................... 82 1. Decarbonization in passenger vehicles through adoption of EV technology ......................... 83 2. Decarbonization in trucks and buses - the outlook for a shift to EV technology .................... 86 3. Decarbonization in shipping and aviation ............................................................................... 88 4. Aiming for decarbonization in the transport sector with a shift to EV technology and energy efficiency ................................................................................................................................. 89 Chapter 3: Social and Regulatory Innovation for a Decarbonized Society ............. 92 3.1 Components essential in Japan's Long-Term GHG Reduction Strategy ................................. 92 3.2 The harmful effects of the government's emphasis on uncertainty .......................................... 93 3.3 Introducing basic rules for a decarbonized society to Japan .................................................... 94 3.4 Japan must act now to fulfill its responsibility to the next generation ....................................... 98 [Table of Figures] Figure 1-1 1.5°C Report’s Four Scenarios .......................................................................................... 13 Figure 1-2 IRENA Scenario ................................................................................................................. 15 Figure 1-3 IEA Scenario ...................................................................................................................... 16 Figure 1-4 Japan’s CO2 Emissions by Sector and Industrial Sector Breakdown (FY2017, direct emissions) ........................................................................................................................ 19 Figure 2-1 Ratio of Renewables to Total Power Consumption in 2018 .............................................. 22 Figure 2-2 China’s Power Generation Projections by Power Source in the Stated Policies Scenario 24 Figure 2-3 Trends in Generation Costs by Power Source (Global, New Plants, 2010-2018, LCOE w/o Subsidies) ........................................................................................................................ 25 Figure 2-4 Ratio of Low Carbon Power Sources in Total Global Power Output and Future Projections ......................................................................................................................................... 26 Figure 2-5 Solar and Wind Power Costs (2012-2018) ........................................................................ 28 Figure 2-6 Solar Power System Price Projections (to 2030, by system size) ..................................... 30 Figure 2-7 BloombergNEF Energy Cost Forecasts (to 2050) ............................................................. 31 Figure 2-8 Population of Japan and Six European Countries (2016-2017 estimates from the UN’s “Population and Vital Statistics Report”) .......................................................................... 32 Figure 2-9 Japan’s Power Mix, FY2017 results (left), FY2030 (long-term energy supply-demand projections) (right) ............................................................................................................ 33 Figure 2-10 Sustainable Power Mix in 2030(based on REI’s assumptions) ......................................... 34 Figure 2-11 FY2030 Electricity Price Estimates (REI and government scenarios) .............................. 35 Figure 2-12 Japan Offshore Wind Condition Map ................................................................................. 36 Figure 2-13 Asia International Grid (Japan-Russia Route) ................................................................... 37 Figure 2-14 Asia International Grid (Japan-South Korea Route) .......................................................... 37 Figure 2-15 Nuclear Reactor Capacity Projection to 2050 .................................................................... 38 Figure 2-16 Coal Consumption by Japan’s Power Industry .................................................................. 43 Figure 2-17 Total Capacity of Existing and Planned Coal-Fired Plants, Development Status, and Operation Start/End/Suspend Plans ............................................................................... 44 Figure 2-18 Comparison of Fossil Fuel-Fired